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Which of the following statements is not true about a family menber partner in a business...

Which of the following statements is not true about a family menber partner in a business where capital is a material income -producing factor?

A. The family menber must have joined the business in good faith

B. The family member must have acquired their capital interest in a bona fide transation

C. The family member must actiary own their partneship interest

D. The family member must actuary control their partnership interest

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Answer #1

ANSWER : Statements which is not true about a family member partner in a business where capital is a material income -producing factor is option A i.e. The family member must have joined the business in good faith.

Members of a family can be partners. However, family members (or any other person) will be recognized as partners when capital is a material income-producing factor, only if one of the following requirements is met.

  1. If they acquired their capital interest in a bona fide transaction (even if by gift or purchase from another family member),
  2. actually own the partnership interest,
  3. or actually control the interest.
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